The payment reflects the full damages awarded by the
International Chamber of Commerce as well as recovery of Dow’s
costs, the Midland, Michigan-based company said today in
regulatory filing. Dow plans to use the money to pay down debt
and remunerate shareholders, Chairman and Chief Executive
Officer Andrew Liveris said today in a statement.

“This was earlier and larger than we expected, and gives
management more flexibility for evaluating the structure of
Dow’s portfolio,” Laurence Alexander, a New York-based analyst
at Jefferies & Co., said in a report today.

PIC, a unit of state-owned Kuwait Petroleum Corp., canceled
a contract forming K-Dow, a 50-50 venture with Dow’s plastics
unit, in December 2008. The failure of the venture deprived Dow
of a $9 billion payment during the financial crisis, almost
derailed its 2009 purchase of Rohm & Haas Co. and prompted the
company’s first dividend cut.

Dow rose 1.6 percent to $34.54 at the close in New York,
the highest since Jan. 30. The shares have gained 6.8 percent
this year.

Excluding Interest

Dow said in the filing the payment was “exclusive of
interest,” which has been accumulating since the company was
awarded $2.16 billion in May 2012. Dow and PIC entered into a
deed on May 6 that provides for the settlement and assures that
Kuwait Petroleum won’t take “retaliatory or punitive actions”
against Dow as a result of the payment, according to the filing.

Dow was to receive $2.48 billion with the addition of
interest and costs, the company said in a March 4 statement.

Dow still has four joint ventures with Kuwait that predate
K-Dow, including Equate Petrochemical Co. and MEGlobal, which
make ethylene glycol, a chemical used in antifreeze and
polyester.

“Dow and Kuwait share a long history, and payment of this
award brings final and appropriate resolution and closure to the
issue,” Liveris said in the statement.

PIC canceled the joint venture under pressure from Kuwaiti
lawmakers. Kuwait’s parliament has since demanded an
investigation into why the contract was canceled.